The wait staff in a restaurant usually receive both tips and an hourly wage. The hourly rate is normally less than minimum wage due to laws allowing employers to consider tips as part of a tipped employee’s wages. The federal government and many states have enacted laws defining how much an employer may claim as a tip credit. In addition, some states have passed minimum wage laws that exceed the federal standard. Whenever there is a conflict between state and federal laws, employers must follow the law that gives the employee the greater benefit.

The wait staff in a restaurant usually receive both tips and an hourly wage. The hourly rate is normally less than minimum wage due to laws allowing employers to consider tips as part of a tipped employee’s wages. The federal government and many states have enacted laws defining how much an employer may claim as a tip credit. In addition, some states have passed minimum wage laws that exceed the federal standard. Whenever there is a conflict between state and federal laws, employers must follow the law that gives the employee the greater benefit.

Federal Law

As of 2013, the federal minimum wage is $7.25 per hour. Employers may claim a tip credit for employees who regularly earn more than $30 per month in tips. However, the employer must pay the wait staff at least $2.13 per hour as a cash wage. If the employee’s cash wages and tips combined are less than $7.25 per hour, the employer is legally obligated to pay the employee the difference.

States Prohibiting Tip Credit

Some states do not allow employers to take a tip credit. This means that the minimum hourly wage for employees who receive tips is the same as the rate for employees who do not earn tips. Among the states prohibiting tip credits are Alaska, Oregon, California, Minnesota, Washington, Montana and Nevada. Several of these states also have minimum hourly rates that are higher than the federal rate. In 2013, the minimum hourly rate in Alaska was $7.75, and it was $8 in California. Montana set a minimum wage of $7.65 per hour for all businesses grossing more than $110,000 annually. Minimum wage is $8.95 in Oregon and $9.19 in Washington. Nevada’s minimum wage is the same as the federal, but if the employer does not provide health insurance, the employee must receive at least $8.25 per hour.

States Allowing Tip Credits

Most states allow employers to claim a tip credit. In fact, 37 states and the District of Columbia permit the practice, and each has established the minimum cash wage that tipped employees must receive. Wyoming, Indiana, Virginia, Kansas, South Dakota, Kentucky, North Carolina, Nebraska, New Mexico, Utah and Texas have established rates that agree with the federal law requiring tipped employees to receive at least $2.13 per hour in cash wages. The minimum cash wage must be at least $4.80 in Arizona, $2.63 in Arkansas and $4.76 in Colorado. Tipped employees in Delaware must receive at least $2.23 in cash wages. The number is $2.77 in the District of Columbia, $4.77 in Florida, $3.35 in Idaho and $4.95 in Illinois. Servers in Iowa must be paid at least $4.35 per hour in regular wages, and in Maine, the minimum is $3.75. Maryland, Massachusetts and Michigan have respective rates of $3.63, $2.63 and $2.65. Missouri set its rate at $3.675 per hour. The minimum cash wage for tipped employees is $4.86 in North Dakota, $3.93 in Ohio, $2.83 in Pennsylvania, $2.89 in Rhode Island, $4.17 in Vermont, $5.80 in West Virginia and $2.33 in Wisconsin.

States With Conditional Laws

Some states attach specific conditions to whether an employer can claim a tip credit or how much he may claim. In Connecticut, the minimum cash wage is $7.34 for bartenders and $5.69 for other tipped employees. In New York, the rate ranges between $4.90 and $5.65, depending on the type of employer. Oklahoma sets the rate at $5.12 per hour unless the employer provides lodging and food, in which case the minimum rate is $3.63.

2016 Salary Information for Waiters and Waitresses

Waiters and waitresses earned a median annual salary of $19,990 in 2016, according to the U.S. Bureau of Labor Statistics. On the low end, waiters and waitresses earned a 25th percentile salary of $18,360, meaning 75 percent earned more than this amount. The 75th percentile salary is $26,590, meaning 25 percent earn more. In 2016, 2,600,500 people were employed in the U.S. as waiters and waitresses.

About the Author

Jeffrey Joyner has had numerous articles published on the Internet covering a wide range of topics. He studied electrical engineering after a tour of duty in the military, then became a freelance computer programmer for several years before settling on a career as a writer.